← Search

Market Segmentation Through Information

Matthew Elliott¹; Andrea Galeotti²; Ae-Ran Koh³; Wenhao Li⁴

¹ University of Cambridge · ² London Business School · ³ Massachusetts Institute of Technology · ⁴ Faculty of Business and Economics, The University of Hong Kong , Pokfulam Road ,

Abstract We explore the power that precise information about consumers’ preferences grants an intermediary in shaping competition. We think of an intermediary as an information designer who chooses what information to reveal to firms, which then compete à la Bertrand in a differentiated product market. We analyse the information designs that maximize consumer and producer surplus and uncover systematic differences in how information can be used to intensify or soften competition. Our analysis demonstrates the power that users’ data can endow intermediaries with and speaks directly to current regulatory debates regarding digital marketplaces.

DOI

10.1093/restud/rdag067

Language

en

Export

BibTeX

Sources

crossref openalex